Armstrong's Bullish Case for Crypto Adoption Sparks Hope for Long-Term Growth
Coinbase CEO Brian Armstrong believes cryptocurrency doesn't get enough credit for providing financial access to people worldwide. He points out that stablecoins offer a low-inflation currency accessible to anyone, anywhere, and at any time. Decentralized finance (DeFi) applications give individuals access to credit and allow unbanked people to use financial services. Tokenized stocks expand the total addressable market for U.S. equities by making it easier for overseas investors without U.S. brokerage accounts to invest in U.S. companies.
Armstrong's perspective is not surprising, given Coinbase's position as one of the world's largest cryptocurrency exchanges. If his views are correct, this could be a good time to review how these catalysts can boost your crypto portfolio's long-term returns.
The market's largest stablecoins, Tether and USD Coin, are pegged to the U.S. dollar. These coins can be deposited into third-party lending markets, automated market makers, and liquidity pools to earn higher yields than traditional dollar-based savings accounts. However, some of these platforms are riskier than FDIC-backed banking accounts.
Another simple way to invest in the growth of the stablecoin market is through Circle, which generates most of its revenue by collecting interest on the cash and U.S. Treasuries it holds to back its own stablecoins. Through a revenue-sharing agreement with Circle, Coinbase also receives all of the interest income generated from the USDC held directly on its platform.
Ethereum and Solana will profit from the increased development of decentralized apps and tokens. Both blockchains support smart contracts, which are used to develop those apps and crypto assets. Chainlink's native LINK token will become more valuable as its network expands, as it gathers data from external sources and delivers them to Ethereum, Solana, and other blockchains in real time.
When a stock is tokenized, it becomes a digital token on a blockchain that can be traded much faster than traditional stocks without going through any middlemen. These tokens can also be traded 24/7, split into fractional shares, easily flow across international borders, and be easily integrated into DeFi applications via smart contracts.